mortgage Guide

Many buyers seek outside financing to assist them in purchasing Manhattan apartments. Banks and other lending agents will provide a loan in the form of a mortgage. A mortgage is essentially a long-term loan, usually for 15 or 30 years, which is repaid to the lender by monthly payments. The borrower, of course, pays not only the principal, but also the interest on the loan. The interest rate may be fixed for the mortgage duration or it may change periodically. Loans which call for the interest rate to change periodically are also referred to as adjustable rate mortgages (or ARMs).

If you need a mortgage to finance your NYC condo, co-op, or cond-op purchase, you are best advised to begin approaching mortgage lenders early on in the apartment search process. A mortgage lender or broker may be retained through your bank or through an independent private company. A mortgage lender can sit down with you to review your financials, and will be able to help you determine your actual buying potential. By working with the mortgage lender in advance, you can also request written pre-approval for a mortgage, which gives you leverage during the apartment search and the negotiation process. Including a pre-approval in your financial package, especially in the Manhattan sales market, demonstrates your fiscal stability and shows that you've done your homework: you're poised and ready to buy. This, of course, is very attractive to a seller who is eager to move his or her apartment to a prepared and responsible buyer.

To choose a lender, you may want to consult with your Anchor Associates agent who can recommend one of the mortgage brokers with whom they have worked in the past. You may want to begin by approaching the mortgage or home loans division of your bank. Generally, all mortgage brokers will require basic financial paperwork in order to determine whether you qualify for a mortgage. Typically, such paperwork will include:

  • Recent pay stubs and W-2s for the past two years
  • If self-employed, tax returns and a letter from your CPA concerning your self-employment history
  • Any documentation about other income you may use to finance your purchase (i.e.: stock dividends, alimony, retirement, etc.)
  • Bank and investment statements - 3 months, including all pages
  • A copy of your purchase agreement along with relevant contact information

Be aware that the mortgage lender will perform a credit check. You may want to review your credit report first to deal with any outstanding derogatory information before approaching the lender.

Many banks and mortgage brokerage firms have online calculators, as well as institution-specific guidelines, that can give you some idea of what to expect, both financially and in your interactions with that specific lender. Familiarize yourself with the lending institution before entering into any agreement with them. Also confirm that they have extensive experience with the specific lending practices related to the New York City condo and coop markets.

This is a long-term relationship and you are approving them just as much as they are approving you. Both parties should be comfortable with one another's abilities, commitment, and level of performance. This will make the financing of your Manhattan apartment a more organized and comfortable process.

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